The Pension Challenge Risk Transfers and Retirement Income Security

by Mitchell, Olivia S.; Smetters, Kent

• ISBN13: 9780199266913
• ISBN10: 0199266913
• Format: Hardcover
• Copyright: 2004-01-29
• Publisher: Oxford University Press

Summary

This book, the first in a new series produced by the Pension Research Council of the Wharton School in collaboration with Oxford University Press, explores ways to enhance retirement security in a volatile financial environment. The book begins by assessing the myriad retirement risks confronting employees, retirees, employers and governments. This book illustrates how stakeholders can reinvent pensions that perform will in a competitive global setting. Contributors then indicate how pension systems can be better designed to help protect against these risks. Of special interest is a discussion of new financial products and structures to meet and manage challenges to old-age security. Examples considered include pension investment guarantees and hedges, adapting catastrophe bonds to the pension context, and key regulatory draw important lessons for a wide range of countries, drawing from both developed and developing market experiences. Contributors include world-famous finance experts and risk management faculty, development economists, pension regulators and pension consultants.

Author Biography

Olivia S. Mitchell is the International Foundation of Employee Benefit Plans Professor of Insurance and Risk Management, and Director of the Pension Research Council at the Wharton School of the University of Pennsylvania, and also a research Associate at the National Bureau of Economic Research. Her academic research explores private and public insurance, risk management, public finance and labour markets, and compensation and pensions, with a US and an international focus. Previously she taught at Cornell University, visited Harvard University and the University of New South Wales, served on the Us Department of Labor's ERISA Advisory Council, and served as a Board Member for Alexander and Alexander services, Inc. She recently served on President Bush's Commission to Strengthen Social Security. She received her PhD in Economics from the University of Wisconsin-Madison. Kent Smetters is an Assistant Professor in the Insurance and Risk Management Department at the Wharton School at the University of Pennsylvania. Previously he worked at the Congressional Budget Office, visited the Stanford Economics Department, and served as Deputy Assistant Secretary for Economic Policy of the US Treasury. His research interests include intergenerational risk sharing within households. He received his PhD in Economics from Harvard University.

Table of Contents

List of Figures	ix
List of Tables	xi
Note on Contributors	xv
Abbreviations	xix
1. Overview: Developments in Risk Management for Retirement Security	1	(18)
Olivia S. Mitchell and Kent Suretters
Part I. Plan Sponsors and Retirement Income Risk
2. An Analysis of Investment Advice to Retirement Plan Participants	19	(14)
Zvi Bodie
3. The Role of Company Stock in Defined Contribution Plans	33	(38)
Olivia S. Mitchell and Stephen P. Uthus
4. Company Stock and Pension Plan Diversification	71	(18)
Krishna Ramaswamy
5. Integrating Payouts: Annuity Design and Public Pension Benefits in Mandatory Defined Contribution Plans	89	(13)
Suzanne Doyle and John Piggott
6. Risk Transfer in Public Pension Plans	102	(14)
Jeremy Gold
7. Securing Public Pension Promises through Funding	116	(43)
Robert Palacios
Part II. Global Developments in Retirement Risk Transfer
8. Understanding Individual Account Guarantees	159	(28)
Marie Eve Lachance and Olivia S. Mitchell
9. Money-Back Guarantees in Individual Pension Accounts: Evidence from the German Pension Reform	187	(27)
Raimond Maurer and Christian Schlag
10. Hedging Segregated Fund Guarantees	214	(24)
Peter A. Forsyth, Kenneth R. Vetzal and Heath A. Windcliff
11. Retirement Guarantees in Mandatory Defined Contribution Systems	238	(13)
Jan Walliser
12. Retirement Guarantees in Voluntary Defined Contribution Plans	251	(17)
John A. Turner and David M. Rájnes
13. Securitized Risk Instruments as Alternative Pension Fund Investments	268	(41)
J. David Cummins and Christopher M. Lewis
14. Credit Implications of the Payout Annuity Market	309	(22)
Arthur Fliegelman, Moshe Arye Milevsky, and Scott A. Robinson
Index	331